09:12 AM EST, 12/26/2024 (MT Newswires) -- Palantir Technologies ( PLTR ) and Salesforce ( CRM ) remain the two best plays in the software sector to benefit from the artificial intelligence revolution heading into 2025, Wedbush Securities said in a Thursday client note.

Palantir ( PLTR ) is positioned to continue expanding its pipeline and deal flow and provide more use cases to address critical problems across industries as organizations are expected to substantially increase AI spending within their IT budgets next year, according to the brokerage.

Palantir ( PLTR ) has been a major investor focus during the AI revolution because of the expanding use of its products, resulting in a larger partner ecosystem with accelerating demand for enterprise-scale and enterprise-ready generative AI, Wedbush said. The brokerage expects this to be a major growth driver for the company's commercial business over the next 12 to 18 months as more entities choose Palantir ( PLTR ) for the AI push.

"We believe Palantir ( PLTR ) has a credible path to morph into the next Oracle (ORCL) over the coming decade with (Artificial Intelligence Platform) leading the way as many on the Street continue to be huge skeptics of the Messi of AI," Wedbush analysts led by Daniel Ives wrote in the note.

The brokerage views Salesforce ( CRM ) as a "clear second derivative beneficiary" of the AI boom that could add roughly $80 per share to its story. The company is poised to capture its fair share of market expansion through AI monetization, which is projected to drive the firm's growth over the next 12 months to 18 months, according to Wedbush. The brokerage also highlighted a $7 trillion digital labor market opportunity for the firm with its new agent-focused platform, Agentforce.

"The AI software era is now here in our view," according to Ives. "We believe the two best software plays on the AI revolution into 2025 remain Palantir ( PLTR ) and Salesforce ( CRM )."

Wedbush expects companies in the broader software industry including Oracle, International Business Machines ( IBM ) , Snowflake (SNOW) and MongoDB ( MDB ) to benefit from the AI boom with use cases increasing, enterprise consumption rising, and the launch of large language models.